People flock to live in D.C.'s Capitol Riverfront area despite commercial stall

By Tracey L. Longo
Special to The Washington Post
Saturday, March 27, 2010;
E01

When fans descend on Nationals Park for the team's home opener against the Philadelphia Phillies on April 5, they'll notice big league changes in the neighborhood surrounding the three-year-old stadium. Commercial development, which had been on a tear before the recession, remains stalled. But residents are streaming in.

Since April, more than 1,700 people have moved into the area, bringing the number of residents to 2,700, according to the Capitol Riverfront Business Improvement District. Residential properties are more than 85 percent leased or 75 percent sold, on average. (The Onyx on First, a high-rise luxury rental building on First Street SE, is 97 percent leased.)

New townhouses priced in the mid-$600,000s are selling out before they're built, according to developers and BID officials. Condominium and apartment buildings are drawing newcomers, attracted by the proximity to employment sites such as the Transportation Department's new headquarters as much as for baseball.

For Tom and Laurie Park, empty nesters with two kids in college, it was the quest for a better quality of life that led them to buy a one-bedroom in the Velocity condominium when the luxury high-rise opened in October.

Laurie Park works as director of financial management at the Transportation Department, which is only two blocks from their door. They're keeping their house in Fredericksburg, which backs up to picturesque parkland, to use on weekends.

"The cultural life is just better in D.C.," Tom Park said. "It was taking us two to two and a half hours to commute in from Fredericksburg every day. It got worse every year. When the DOT moved its headquarters here to the Navy Yard, we kept our eye on new construction. We visited the model 10 times before we bought.

"I think we do have all the services we need here," Park said. "Our dogs love it. We're looking forward to using the roof deck. It's a nice place to go in the evening with a Scotch and watch the moon come up. And we'll definitely take in a few ballgames."

Baseball fans arriving from the M Street SE side of the stadium may see boarded-up commercial buildings and construction fencing, but Park said he thinks it's only a matter of time before developers' plans materialize.

"This area and its location is just too inviting," he said. "We need more restaurants, but they'll come as the people move in. Full development may be five years away, but we're willing to wait."

Gone are the 23 acres of the old Arthur Capper/Carrollsburg Dwellings housing complex that dominated the area for more than 60 years. New is the new five-acre waterfront Diamond Teague Park directly behind the stadium. The park's piers provide dockage for water taxis that shuttle people from Alexandria, National Harbor and the stadium.

In addition to the Parks' home, the Velocity, which has 14 floors and 200 units, ballpark visitors may also notice the 237 new Capitol Yards rental units, plus the 160 townhouses that have been finished as the first phase of Capitol Quarter, a 322-unit development. Just five blocks south of the Capitol and west of the Barracks Row restaurant district, the Capitol Riverfront neighborhood has 1.5 miles of frontage along the Anacostia River and shares its northern border with Capitol Hill. The neighborhood is served by the Navy Yard and Capitol South Metro stations.

"This is one of our strongest developments. We had people camping out to buy presale," said Brian Allan Jackson, senior vice president of EYA, developer of the Capitol Quarter townhouses.

EYA plans to build 163 more townhouses over the next two years. "We already have a waiting list; we'll be sold out before we're completed," Jackson predicted.

"There just aren't a lot of opportunities to buy a new rowhouse in the District with a Capitol Hill location," he said.

EYA, which won the bid to develop the plot from the D.C. Housing Authority, is also building 144 market-rate units and 83 affordable rental units.

Although the Parks bought a home for the lifestyle, others are buying as a long-term investment. Silver Spring residents Eliana Hassan and Asemorom Woldu, both in their 30s, have bought four properties in Capitol Riverfront since 2001.

The couple own a studio co-op, two two-unit apartment rowhouses and a new luxury two-bedroom condominium, which rent for $1,000 to $3,500 a month.

"We're hoping, long term, this will fund our kids' education and our retirement," said Hassan, a director of global relationship management for a staffing firm. "Because of the demographics of the people investing and moving here, we think it's a wonderful neighborhood and great investment for the long term."

Their studio co-op has more than doubled in value since Woldu bought it for $47,000 in 2001.

"We're seeing more of a pioneering buyer here, someone who wants to buy into a promising area early," said Vicki Johnston, sales manager at the Velocity, at 1025 First St. SE. It has sold 75 of its units.

The area gets high marks for residential growth, but the neighborhood has taken its share of knocks because of the lingering economic slump, which has derailed commercial development.

Forest City Washington, which is developing about 55,000 square feet of land in the Capitol Riverfront area, is among many companies stymied by the lending squeeze. "We're finding that levels of preleased commitments that would have gotten the attention of lenders just a few years ago have [been] increased dramatically," Gary McManus said. "Where it used to be [that we needed to be] 50 percent preleased, it's now 85 percent."

The firm is working with the Department of Housing and Urban Development to secure financing to finish the Yards Foundry Lofts, a mixture of 170 high-end and affordable waterview condominiums at 201 Tingey St. SE. Construction ceased in fall 2008, when the company failed to obtain financing.

"We're now in the process of finalizing our construction loans, and we plan to restart the project in April, with a finish date of summer 2011, " McManus said. Other phases of the Yards are supposed to include a marina and three retail buildings, scheduled to be finished by 2012.

To expedite what was to be a high-rise office building anchored by a Harris Teeter grocery, Forest City is considering a redesign that would make the building residential. "We're considering other uses," McManus said. "The attitude is, the office market was holding up the grocery store, so the building is in for a redesign now."

On the restaurant front, there have been slim pickings. The Bullpen, a large tent bar serving beer and hot dogs outside the stadium at Half Street SE, will be open again this year.

It has been the only restaurant near the stadium serving alcohol and was open only on game days, but it will be joined this year by Justin's, a sit-down fire-oven pizza restaurant scheduled to open in the Velocity building next month. And Forest City Washington continues work on the redesign and renovation of the historic Boilermaker Shop, set to house 12 restaurants and a jazz club, McManus said.

Cornercopia gourmet grocery, which also serves sandwiches, is open on Third and K streets SE.

Nationals Park is opening several restaurants and entertainment venues this spring as well as continuing to stage events such as concerts. "We're bringing in the Eagles and the Dave Matthews Band this year as a way to attract all types of people to the area," said Nationals Vice President Gregory McCarthy.

"We want to make it attractive for restaurateurs to be open year-round."

Developers hope the influx of new residents and a need for office space will spur development. "This has been a hard year for everyone," said Michael Stevens, executive director of the Capitol Riverfront BID. "But we've been very pleased with residential growth and now the Navy's expansion. I think that when the dam breaks, the development will be nonstop."